North Dakota oil boom exploding

Posted: Monday, July 2, 2012

Investor's Business Daily Editorial

North Dakota is experiencing such a boom in revenues from oil production that voters actually considered a measure to abolish the state’s property taxes.

Although the measure was defeated in the June 12 vote, the fact that it was even considered points to the incredible economic opportunities enjoyed by North Dakota residents due to unfettered oil production.

“It turns out that, yes, we can drill our way out of our problems,” Investor’s Business Daily (IBD) observes in an editorial.

“If you can see a pattern here, you're way ahead of President Obama. His argument is that we can't drill our way out of high energy prices let alone out of debt and the need for higher taxes. But it's about to be exposed once again as the self-serving falsehood it is.”

North Dakota in March pumped oil at the rate of 575,490 barrels per day, replacing California as the nation's No. 3 oil-producing state behind Texas and Alaska. At its current rate of production growth, North Dakota will likely surpass Alaska sometime this year.

Continental Resources, which operates 10 percent of the drilling rigs in North Dakota, estimates there are more than 900 billion barrels of oil in place.

Only 27 billion to 45 billion barrels are actually recoverable using today's technology, but that amount will grow as technology advances.

Thanks to the energy boom, North Dakota has the nation's lowest unemployment rate at just over 3 percent, and Williams County — at the center of the drilling boom — boasts the lowest jobless rate in the country at just 0.7 percent.

Oil revenues in the state generated some $840 million in fiscal 2011 and are expected to deliver more than $2 billion over the next two years. State per-capita income is $4,000 above the national average.

“The North Dakota oil boom has occurred on private and state lands, unfettered by federal edict that has placed out of reach much of the estimated 200-year supply of oil within our borders,” IBD stated, noting that 94 percent of federal onshore lands and 97 percent of federal offshore lands are off-limits to oil and gas drilling.

As the Insider Report disclosed earlier, the Green River Formation, a largely vacant area where Colorado, Utah, and Wyoming come together, contains about as much recoverable oil as all the rest of the world's proven reserves combined.

But most of the oil is beneath federal land overseen by the Department of the Interior's Bureau of Land Management, and the government has "locked up" development of the huge resource, critics charge.

“Critics will say North Dakota is a small state and its success couldn't be replicated nationwide,” IBD concludes. “Oh, yes it can.

“We can cut taxes, boost employment and jump-start economic growth if we tap into that 200-year supply of oil and back oil-extraction technology with as much enthusiasm as the Obama administration backs electric cars and high-speed rail.”